The Basics of Student Loan Debt and Bankrutpcy
Some people go to college or a trade school right after they complete their high school education. Others may wait till later in life, when they decide to pursue new careers. Most of these individuals will need financial assistance to attend these institutions, and have to take out student loans to pay the significant costs associated with a higher education.
When these students graduate, they will be expected to begin making payments on these student loans, whether they are employed or not. If the students are struggling to find work, these payments can quickly lead to serious financial problems, leaving them with very few options to eliminate student loan debt.
Many companies advertise their services to assist students in dealing with this type of debt. They tell the students exactly what they want to hear, and make promises concerning the amount of money that they will have to pay back. The students spend large sums of money on these companies, only to find out that their debts are not getting paid. In fact, little work is being done on their behalf, and the debt has only increased.
Some individuals may think of filing for bankruptcy, but, in most situations it may not remove the outstanding student loan debt. This type of debt is only permitted to be discharged in bankruptcy in cases of undue hardship, a very high standard.
However, filing for bankruptcy does provide these debtors with the time they need to get their finances back on track. The bankruptcy stops any collections that may be happening, and also allows the individuals to deal with other debts that they may have accumulated while experiencing these financial problems. This can help the borrowers become current on their payments, and stay caught up in the future.
You need to take immediate action as soon as you first start having problems paying your bills. If you let past-due amounts continue to go unpaid, you will only make a difficult situation much, much worse. Interest on these amounts will increase, and your creditors may even begin pursuing collections actions.
An experienced bankruptcy attorney can help you sort through the options that are available to you. It is likely that you are unsure of what is best for you, and an attorney will be able to carefully review the facts to learn more about your financial situation.
If you decide to file for bankruptcy, your attorney can help you create a plan that will protect your interests. Once you know the steps you need to take, you can pursue a more promising financial future.
At Illini Legal Services, we offer a free, no-obligation consultation to each of our clients. During your consultation, we will take the time to listen to your financial concerns and assess your case and individual situation. We have five locations to serve you. Contact us today for help!
Illini Legal Services is engaged in the private practice of law and is not a public legal aid agency. We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.